LOTUS RESOURCES LIMITED — Investor Presentation 2021

Feb 1, 2021

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Kayelekera Proven Uranium Producer 121 MINING AFRICA CONFERENCE - FEBRUARY 2021

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Important Notice
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FORWARD LOOKING STATEMENT

Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from those expressed or implied by such forward-looking information, including risks associated with investments in private and publicly listed companies such as Lotus Resources (Lotus or Company); risks associated with general economic conditions; the risk that further funding may be required but unavailable for the ongoing development of the Company’s projects or future acquisitions; changes in government regulations, policies or legislation; unforeseen expenses; fluctuations in commodity prices; fluctuation in exchange rates; litigation risk; restrictions on the repatriation of funds by the Company’s subsidiaries; the inherent risks and dangers of mining exploration and operations in general; risk of continued negative operating cashflow; the possibility that required permits may not be obtained; environmental risks; uncertainty in the estimation of mineral resources and mineral reserves; general risks associated with the feasibility and development of the Company’s Kayelekera Project (Project); foreign investment risks in Malawi; changes in laws or regulations; future actions by government; breach of any of the contracts through which the Company holds property rights; defects in or challenges to the Company’s property interests; uninsured hazards; disruptions to the Company’s supplies or service providers; reliance on key personnel, retention of key employees and the impact of the COVID-19 pandemic on the Company’s business and operations.

Forward-looking information is based on the reasonable assumptions, estimates, analysis and opinions of management of the Company made in light of their experience and their perception of trends, current conditions and expected developments, as well as other factors that management believes to be relevant and reasonable in the circumstances at the date that such statements are made, but which may prove to be incorrect. The Company believes that the assumptions and expectations reflected in such forward-looking information are reasonable.

Assumptions have been made regarding, among other things: the uranium market information, the Company’s peers, the Company’s ability to carry on its future exploration, development and production activities, the timely receipt of required approvals, the price of uranium, the ability of the Company to operate in a safe, efficient and effective manner and the ability of the Company to obtain financing as and when required and on reasonable terms. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used.

Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause the Company results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

NO LIABILITY/SUMMARY INFORMATION

Lotus has prepared this presentation material (Presentation) based on information available to it at the time of preparation. No representation or warranty, express or implied, is made as to the fairness, accuracy or completeness of the information, opinions and conclusions contained in the Presentation. To the maximum extent permitted by law, the Company, its related bodies corporate (as that term is defined in the Corporations Act 2001 (Commonwealth of Australia)) and the officers, directors, employees, advisers and agents of those entities do not accept any responsibility or liability including, without limitation, any liability arising from fault or negligence on the part of any person, for any loss arising from the use of the Presentation or its contents or otherwise arising in connection with it.

SCOPING STUDY

For information relating to the Restart Scoping Study in this document, refer to ASX announcement dated 20 October 2020. The Company confirms that In relation to the Restart Scoping Study announced on 20 October 2020, it is not aware of any new information or data that materially affects the information included in the original market announcement and that all material assumptions underpinning the forecast financial information included in that announcement continue to apply and have not materially changed.

MINERAL RESOURCE (JORC 2012)

For information referring to the Resources in this document, refer to ASX announcements dated 26 March 2020 and 24 June 2019. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcements; and that the information in the announcement relating to exploration results is based upon, and fairly represents the information and supporting documentation prepared by the named Competent Persons.

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February 2021 lotusresources.com.au ASX: LOT | 2
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CAPITAL STRUCTURE
Lotus Resources – Why invest?
808.9m $120m
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• Lotus Resources is a low capital cost and proven option in the uranium sector through its ownership of the Kayelekera Project in Malawi

SHARES ON ISSUE

MARKET CAP At $0.15 / share

• US$200m spent on infrastructure at Kayelekera

• 11Mlbs of historical uranium production

• 37.5Mlb existing resource with limited exploration during the past 20 years[1]

CASH AT DEC 2020 Unrestricted / Restricted

OPTIONS

• Positive Scoping Study confirmed Kayelekera as a low capital cost (US$50m), long-life operation (14yrs) with additional upside identified[2]

• Discussions underway with multiple, major nuclear utilities globally

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OWNERSHIP STRUCTURE
Paladin Energy
11%
Sachem Cove
7%
Terra Capital
5%
Retail & HNW Other Institutions
54% 18%
Directors &
management
5%
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• 100% of historical production accepted by conversion facilities in the U.S., Canada and France

• Significant exploration upside – limited exploration during the past 20 years

• Multiple near-mine exploration target areas under review

• Milenje Hills high-grade Rare Earth Oxides (REO) discovery

• Board and management team with 40 years in uranium marketing and mining and 60 years in African mining project development and financing experience

• Uranium market poised for a significant re-rating due to impending supply and demand imbalance caused by sustained low pricing for the past decade

• Significant valuation discount compared to peers

1 – ASX Announcement 26[th] March 2020; 2 – ASX Announcement – 20[th] October 2020

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February 2021 lotusresources.com.au ASX: LOT | 3
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Kayelekera is a Proven Uranium Producer
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1.4Mtpa processing Proven production Significant Resource Permitted for Low C&M costs
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facility 11Mlbs of
US$200m spent on production over 5 ~83% M&I with strong guidance to minimise
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infrastructure years government cash outflow
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1 – ASX Announcement 26[th] March 2020; 2 – ASX Announcement – 9 July 2020 (Care and maintenance operating cost guidance at the Kayelekera Uranium Project reduced by 75% to an annualised operating cost of US$1.2M from the original 2019 budget estimate of c.US$5M).

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February 2021 lotusresources.com.au ASX: LOT | 4
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Top 10 brownfield C&M assets that achieved commercial production

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25.0
100.0 404 102 11.0 11.0
404 102
90.0
9.0
80.0
72
70.0
7.0
5.9
60.0
50.0 5.0
40.0 38
33
30 3.0
30.0 3.0 3.0 2.0 2.0
1.5 1.5
1.3
20.0 16
1.0
16
10.0 7 6
- -1.0
McArthur River - Langer Heinrich - Rabbit Lake - Cameco Kayelekera - Lotus Smith Ranch Azelik - CNNC (Niger) Crown Butte - Willow Creek - Nicholas Ranch - Alta Mesa - Energy
Cameco (Canada) Paladin (Namibia) (Canada) Resources (Malawi) Highland - Cameco Cameco (USA) Uranium One (USA) Energy Fuels (USA) Fuels (USA)
(USA)
Resource (Mlbs U308) Installed Plant Capacity (Mlbs U308)
Resource
Installed Plant Capacity
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Further details are provided in the Appendix 2

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Scoping Study Confirms Low Initial
Capital & Rapid Start Up Potential
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• Scoping Study[1] confirms Kayelekera can be among the first uranium projects to recommence production

• Low total initial capital cost of US$50M, due to existing infrastructure

  • 1.4Mtpa processing facility, onsite acid plant and accommodation camp.

  • Initial capital intensity of US$21/lb production - one of the lowest in the industry.

• Two production scenarios initially considered:

  • Scenario 1: 8-year life of mine, producing 16.4Mlbs U3O8 (~900ppm U3O8).

  • Scenario 2: 14 years life of mine, producing 23.8Mlbs U3O8 with treatment of stockpiles from year 8 (average head grade ~680ppm U3O8).

• C1 cash costs of US$33/lb U3O8 with average production of 2.4Mlbs U3O8 per annum, and multiple opportunities identified to further reduce these costs, including:

  • Upgrading of feed materials (higher U3O8 grades and lower acid consumption)

  • Improved options around power supply

  • Acid recovery rationalisation

  • Optimised tailings disposal options

• Following the positive outcomes of the Scoping Study work has now commenced on technical improvements leading to a Feasibility Study

• LOT ASX announcement – 20[th] October 2020

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February 2021 lotusresources.com.au ASX: LOT | 6
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+20 years of limited exploration presents long term upside with additional Rare Earth potential

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• Kayelekera total endowment of 50Mlbs including current resource (37.5Mlbs)[1] and historical production (11Mlbs)

• Significant greenfield opportunities (5 exploration licences over 675km[2] )

Brownfield targets[2]

• Kayelekera South – six anomalous radiometric targets within 3km of the mine site with no historical drilling

• Mpata – cluster of radiometric anomalies defined outside of mining licence area but within 10 km of the mine site

• Limited historical drilling in the area encountered +250 ppm eU3O8

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Lotus Exploration Tenements
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Milenje Hills high-grade Rare Earth Oxides (REO)[3]

• Geophysics, mapping and trenching identified and discovered highgrade REO material of up to 16% (Av. 8%) and 3.4% (Av. 1.6%) CREO

• • Highly desirable assemblage - Neodymium and Praseodymium oxides represent on average ~20% of the TREO

• Neodymium (Nd), Europium (Eu), Terbium (Tb), Dysprosium (Dy), Yttrium (Y), and Praseodymium (Pr) have seen price increases since last year

• Additional low-cost work to determine the potential of this discovery, prior to assessing the optimal path forward to crystalise value

1 – ASX Announcement 26 March 2020; 2 – ASX Announcement – 16 December 2020; 3 – ASX Announcement – 1 February 2021

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Peer group comprises brownfield assets that achieved commercial production

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EV / Att. Resource [1] EV / Att. Forecasted production [1]
$7.00 $350
$6.00 $300
$5.00 $250
Average – US$4.47 / lb
$4.00 $200 Average – US$184 / lb
$3.00 $150
$2.00 $100
$1.00 $50
$0.00 $0
Paladin Energy UR Energy Energy Fuels Lotus Resources Uranium Energy Energy Fuels UR Energy Uranium Energy Paladin Energy Lotus Resources
Corp Corp
US$ / lb US$ / lb
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1 - Further details are provided in Appendix 3

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Uranium Positioned for Significant Re-rating
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• A decade of low uranium has resulted in no new prices

• developments, discoveries and minimal exploration

• Supply and demand fundamentals have significantly –

• with an estimated 30 60Mlbs U O annum

• tightened 3 8 per shortfall expected by 2024 to 2028

• –

• COVID 19 Affected the uranium industry arguably more than any other with significant positive outcomes

• ~40Mlbs of lost production in 2020 with similar losses expected through 2021

• One of the best performing commodities in 2020 – 30% increase in spot price

• Brought forward the impending supply deficit

• Stand off between producers and utilities

• Higher price required to re-start idle assets and advance new developments

• No substitute for end users; commercial inventories depleting

• Utilities buying focused on ensuring long term guarantee of supply resulted in price increase during the last LT procurement cycle

• The worlds second largest producer, CAMECO, is one of the largest buyers on spot market (26.2Mlb U3O8 acquired during first 9 month of 2020)

• Mayors are preserving long-term value by leaving uranium in the ground and buying uranium on the spot market until pricing increases

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400 Mlbs 400 Mlbs
350 Mlbs 350 Mlbs
UPPER CASE DEMAND
300 Mlbs 300 Mlbs
250 Mlbs 250 Mlbs
SUPPLY GAP
200 Mlbs 200 Mlbs
REFERENCE CASE DEMAND
SECONDARY
150 Mlbs 150 Mlbs
RE-START IDLE
CAPACITY
100 Mlbs 100 Mlbs
50 Mlbs PRIMARY PRODUCTION 50 Mlbs
0 Mlbs 0 Mlbs
2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039
Source: WNA, Nuclear Fuel Report, September 2029; Note: Excludes production cuts through 2020
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February 2021 lotusresources.com.au ASX: LOT | 9
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Source: WNA, The Nuclear Fuel Report, September 2019 Long-Term Contracting Cycle is Imminent

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UTILITIES FACING RAPID PURCHASING
120%
105%
98% Target coverage rate
100% 95%
94%
87%
94%
91%
77%
80% EU Utility Coverage
73%
60% 65%
53%
50% 50%
US Utility Coverage
40% 47%
38%
20%
21% 20%
8%
0%
2020 2021 2022 2023 2024 2025 2026 2027 2028
Source: US Energy Information Administration, EurAtom
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• Nuclear utilities cover their fueling needs through long-term contracts, which generally range between three to ten years

• Typically, no more than 10% are bought on spot

• Decreasing utility contract coverage rates are observed by the market across North America, Asia and Europe

• Further to decreasing contract coverage rates, the market expectation for the next long-term procurement cycle by utilities is based on industry specific fundamentals:

• Utilities need to ensure adequate long-term supply security to effectively generate electricity;

• Nuclear fuel production and delivery cycle requires a minimum of 18-24 months; and

• Most utility nuclear fuel inventories serve as a fuel bank for strategic purposes.

• Lotus has commenced discussions with major utilities globally regarding long-term base loading contracting[1]

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Source: 1 - LOT ASX announcement – 25 August 2020
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Significant Price Increase Required to Meet Growing Demand
2024 2028
ST Demand Mine Supply LT Demand Mine Supply
190Mlb 160Mlb 210Mlb 150Mlb
Annual Deficit Annual Deficit
30Mlbs U3O8 60Mlbs U3O8
Source: WNA, The Nuclear Fuel Report, September 2019; Note: Values based on the reference case rounded to the nearest 10Mlbs U3O8
$90
2019 Cost of Production Estimate US$/lbs U3O8 and production capacity
$80
$70
$60 Kazakhstan
Other
$50
$40
Current spot uranium price
$30
$20
$10
$0
0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 200 210 220
Production Capacity M lbs U3O8
O8
3
U
2019 Cost of Production Estimate US$/lbs
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Source: UxC

Note: (1) Installed uranium production capacity represents operating and idle production capacity installed for producing projects as of August 2019; (2) Cost of production comprises operating and capital costs. Operating costs are made up of mining costs, hauling, milling, production/property taxes, environmental costs, and royalty severance tax. Capital costs are made up of acquisition cost/exploration costs, mine development costs, environmental/infrastructure costs, and general and administrative costs.

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Favorable Long-Term Pricing During the Last Deficit Market
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UTILITY LONG TERM CONTRACTING VOLUME AND PRICING (2006 – 2010)

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$90 205
754M lb U308 sold at prices
$81-90 59 greater than US$60 / lb U308
$71-80 324
$61-70 166
$51-60 121
$41-50 99
≤$40 19
0 50 100 150 200 250 300 350
Utility LT Contract Volumes (U3O8 million lbs)
)O8
Utility LT Contract Price Category (US$/lbs U3
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Source: UxC, Aggregate utility long-term contracting volume and price for uranium in a 5-year period from 2006 to 2010

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Lotus Well Positioned for the Next Uranium Cycle
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Significant existing Proven production Board & Valuation Upside
infrastructure
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Low capex to supply with sales to Extensive African and discount compared
recommence major utilities uranium experience to peers
production
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STRONG PERFORMANCE THROUGH 2021 AND BEYOND

Scoping Study Engineering & Uranium exploration Baseload contact Completed Design Study & resource expansion efforts

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www.lotusresources.com.au

Production, offtake, redevelopment and financing experience in uranium industry

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Eduard Smirnov Managing Director

John Sibley Non-Executive Chairman

Grant Davey Non-Executive Director

Stuart McKenzie Non-Executive Director

Keith Bowes Head of Technical Committee

Eduard has significant international executive experience in the mining and metals sectors developed through his over 15-year career in the resources and financial industries. Eduard served as Uranium One’s Chief Executive Officer from 2016 to 2019, responsible for uranium production, development and exploration in eight countries around the world and for the growth and management of the global utility order book.

John is a corporate director with extensive public and private company board and executive management experience in international mining and resource development, with a focus on corporate finance, M&A and governance. From 2005-2015, John served as EVP of Uranium One Inc. where he played a central role in the company’s development into one of the world’s leading uranium producers.

Grant is an entrepreneur with 30 years of senior management and operational experience in the development, construction and operation of precious metals, base metals, uranium and bulk commodities throughout the world.

Stuart is a senior executive with extensive experience in the resources industry and financial markets.

He has over 30 years experience with 15 years experience working directly with resource companies in Africa.

Keith is a highly regarded mining executive with over 25 years of experience working on project development and operations.

Keith project managed the Boss Resources’ redevelopment program for the Honeymoon Uranium Mine including all study phases and technical trials of the new processing technology.

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Top 10 brownfield C&M assets that achieved commercial production

	Project Name	Kayelekera	Langer Heinrich	Alta Mesa Project	Azelik Project	Nicholas Ranch Project	Rabbit Lake	McArthur River	Smith Ranch Highland	Crown Butte	Willow Creek
	Country	Malawi	Namibia	USA	Niger	USA	Canada	Canada	USA	USA	USA
	Major Owner	Lotus Resources	Paladin Resources	Energy Fuels	CNNC	Energy Fuels	Cameco	Cameco	Cameco	Cameco	Uranium One
	Resource - Total (m lbs)	37.5	119.7	6.4	30.4	7.4	72.3	404.1	32.6	15.8	15.6
	Current capacity of processing facility	3.0	5.9	1.5	1.5	2.0	11.0	25.0	3.0	2.0	1.3
	Source:	Kayelekera Updated	Langer Heinrich Mine	Energy Fuels Annual	NEA: Uranium 2018:	Energy Fuels AIF 2019	Cameco AIF - 2019	Cameco AIF - 2019	Cameco AIF - 2019	Cameco AIF - 2019	Uranium One Annual
		Mineral Resource,	Restart Plan	information form &	Resources, Production	& 43-101					Report 2019
		March 2020	Presentation, June	43-101	and Demand
			2020

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Peer group comprises brownfield assets that achieved commercial production

	Company	Lotus Resources	Paladin Energy	UR Energy	Energy Fuels	Uranium Energy Corp
	Ticker	LOT	PDN	URE	EFR	UEC
	Exchange	ASX	ASX	TSX	TSX	NYSE
	EV (US$ m)	$84	$531	$139	$505	$295
	Project Name	Kayelekera	Langer Heinrich	Lost Creek	White Mesa / Nichols Ranch	Hub & Spoke - Texas ISR & Wyoming ISR
	Country	Malawi	Namibia	USA	USA	USA
	Ownership	65%	75%	100%	100%	100%
	Resource - Total (m lbs)	37.50	119.70	27.10	126.14	103.89
	Grade (ppm)	630	445	401	1690	547
	% of Resource M&I	83%	95%	76%	61%	56%
	EV/ Att. Resource (US$ / lb)	$3.40	$5.92	$5.14	$4.00	$2.84
	Stage of Development	C&M	C&M	C&M	C&M	C&M
	Type of deposit (OP / UG / ISR)	OP	OP	ISR	OP/ISR	ISR
	Forecasted production (Mt pa)	2.5	5.9	0.8	1.7	2.0
	EV / Att. Forecasted production (US$ / lb)	$51	$184	$120	$298	$147
	Source:	Kayelekera Updated Mineral Resource,	Langer Heinrich Mine Restart Plan	Annual information form /	Annual information form /	Annual information form & 43-101
		March 2020 / Re-start Study October	Presentation, June 2020	Presentation	Presentation
		2020

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Appendix 4 – Kayelekera Ownership Structure
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Kayelekera Resources Pty Ltd
(23.5%)
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Lotus Resources Limited
(76.5%)
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Lily Resources Pty Ltd
(85%)
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Government of Malawi
Paladin (Africa) Limited
(15%)
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Kayelekera Uranium
Mine
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Note: Kayelekera Resources Pty Ltd is a third-party financial investor. Lotus Resource and Kayelekera Resources entered into a shareholder’s agreement in June 2019 that governs the rights and responsibilities of both shareholders. The key terms of the agreement are publicly disclosed in the Lotus Resources 2020 Annual Report issued on 1 October 2020.

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February 2021 lotusresources.com.au ASX: LOT | 18
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Appendix 5 – Kayelekera Project Development Milestones

1982	The Central Electricity Generating Board of Great Britain discovered the Kayelekera sandstone uranium deposit
1992	The project was abandoned due largely to the poor uranium outlook, as well as privatization of CEBG and resultant pressure to return to its	core business
1998	Paladin Energy acquired a 90% interest in Kayelekera through a joint venture with Balmain Resources Pty Ltd
2005	Paladin acquired the remaining 10% interest in Kayelekera held my Balmain
2005	Paladin announced the go-ahead of a Bankable Feasibility Study as a result of improved economics shown by the pre-feasibility work
2007	Development Agreement with the Malawi Government, BFS and EIA, the Mining License was granted for a period of 15 years
2008	Open-pit mining commenced in June 2008 to develop initial stockpiles
2009	Commissioning began in January 2009, with first production achieved in April 2009
2010	Kayelekera continued to ramp-up its production volumes and commercial production was declared from 1 July 2010
2012	Paladin began a programme of plant upgrades towards a 3.3Mlb pa capacity with production optimization a key focus
2013	The plant achieved record annual production totaling 2.963Mlb for FY2013
2014	Kayelekera placed into care and maintenance in February 2014 due to low uranium prices
2019	Lotus Resources (then Hylea Metals) agrees to acquire 65% of Kayelekera from Paladin Energy
2020	Lotus completes the acquisition of Kayelekera from Paladin
	lotusresources.com.au February 2021	ASX: LOT

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Appendix 6 – Kayelekera Mineral Resource [1]
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		Grade	U3O8
Category	Mt
		(U3O8 ppm)	(M lbs)
Measured	0.7	1,010	1.5
Measured – RoM Stockpile2	1.6	760	2.6
Indicated	18.7	660	27.1
Inferred	3.7	590	4.8
Total	24.6	660	36.0
Inferred– LG Stockpiles 3	2.4	290	1.5
Total All Materials	27.1	630	37.5

• 1 - ASX announcement 26[th] March 2020.

2 - RoM stockpile has been mined and is located near the mill facility.

3 - Medium-grade stockpiles have been mined and placed on the medium-grade stockpile and are considered potentially feasible for blending or beneficiation, with studies planned to further assess this optionality.

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